The legalization of cannabis in Canada last year opened up a whole new industry. Plenty of companies that became established went on to become industry leaders. While the large caps are well known, there are many mid-cap cannabis stocks that could be of interest to people who are looking to invest in the industry. Among the mid-cap stocks in the industry, Hexo Corp (HEXO) is an interesting company and over the past year, it has gained considerably in terms of market share revenues. In fact, the stock has gained 100% in 2019 until now.
Revenue Growing Steadily
The company has steadily grown its revenues and has also made lofty projections that should come as positive for potential investors. For the quarter that ended on January 31st this year, Hexo reported net revenues of C$ 13.4 million. It was a healthy jump from net revenues of C$ 5.7 million in the previous quarter.
The company has gone on to state that it expects revenues to touch C$ 400 million by next year after it acquired Newstrike Brands. However, it needs to be mentioned that a revenue target of C$ 400 million is perhaps a bit too ambitious. The acquisition has given Hexo a foothold in 5 provinces in Canada that have recorded the highest retail sales for cannabis.
Competent Management Team
Another important factor that is going to work in favor of HEXO is its highly competent management team. More often than not, such companies manage to grow steadily. For instance, the company managed to expand its Gatineau facility less than a year after the announcement and the first harvest was delivered back in March this year. On the other hand, the management’s deal-making prowess has also been impressive.
Cannabis infused beverages are expected to be a significant market eventually and while many of the big-ticket brands have created partnerships, Hexo managed to launch a joint venture with Molson Coors Brewing. For a company the size of Hexo, that is a coup of sorts and displays the management team’s prowess. The company has managed to compete with many of the bigger players and despite the growth in their stock this year, there could be room for further growth.